Many employees will become carers at an earlier age than they expect, prompting concerns about undersaving for the future and calls for employers to support these staff to stay in paid work.
Analysis has revealed that more than a quarter of people (27 percent) think they will become carers by age 67, which is the age people will qualify for the state pension from April 2026. But data shows that half will take on caring responsibilities by the age of 50, with serious implications for how people save for the future.
This earlier than expected shift into caregiving roles can affect career progression, reduce earning potential, and limit opportunities to build up long-term financial security, according to analysis from Phoenix Insights, Phoenix Group’s longevity think tank.
The findings, detailed in a Phoenix Insights report titled ‘Changing Journeys: How we save, work and retire’ (published November 2024), show that 47 percent of carers have no private pension savings at the ages of 60 to 65. Among carers aged 60 to 65 who do have pension savings, carers have 17 percent less than the UK average. Researchers calculated that this equals a shortfall of nearly £37,000.
Sara Thompson, chief people officer at Phoenix Group, said: “People shouldn’t have to choose between caring for a loved one or going to work, but many have to do so with an estimated 2.6 million people leaving the workplace to care for a relative or loved one, which is having a negative impact on their ability to save for their private pension.
“It’s important for businesses to retain valuable employees and do what they can to support colleagues with caring responsibilities to stay in work for as long as they need or want to, through offering flexible working arrangements and providing paid carers leave – giving workers the ability to care for a loved one but not at the expense of their own financial futures.”
Patrick Thomson, head of research analysis and policy at Phoenix Insights, said: “Over the last 30 years we’ve seen major changes in the labour market, with higher overall employment rates, particularly for women. Despite this there are still large number of people economically inactive who are not in work for caring, health or other reasons – hampering their ability to save for their retirement.
“As our population ages, a rapidly growing number are, often unexpectedly and earlier than they anticipated, caring for loved ones across multiple generations. This can put them at particular risk of falling out of paid work and becoming financially vulnerable in later life.”
Previous Phoenix research has also found that 45 percent of unpaid carers struggle to meet even day-to-day living costs because they are out of work with caring responsibilities.
Phoenix Insights polls found that there is a lack of understanding about caring responsibilities, which is being further compounded by many people feeling uncertain about the future. More than two fifths (44 percent) of people can imagine their life over the next five years, but the next 15 feel much less clear as only 31 percent say they view this future period clearly.
